20 Jul How to Calculate the ROI of Medical Records Retrieval Services
Book a Demo TodayLike all third-party services, medical records retrieval solutions come with a price tag. The primary question for law firms and insurance companies is this: Is the extra expense worth it?
To answer that question, you need to be able to determine the return on investment (ROI) of partnering with a retrieval service.
Wondering how to calculate the ROI of medical records retrieval services? This guide breaks down the hidden costs of in-house record retrieval, explains how to quantify the financial benefits, and outlines common mistakes to avoid.
Why ROI Matters in Medical Records Retrieval
Whether you retrieve medical records internally or outsource the process to a trusted third party, there are costs associated with obtaining patient records. In other words, there’s no avoiding “making an investment” in record retrieval.
With that said, you can still invest that time and money in the most advantageous way.
As with any cost of doing business, your record retrieval operations represent an opportunity to save money. However, if you don’t measure your ROI, you can’t identify inefficiencies and replace them with better, more cost-effective measures.
ROI figures can also help you justify spending to leadership and other stakeholders. When you have a definite idea of how much you spend on medical record retrieval services and the value that cost returns, it’s easier to make the case to spend more (or less) on it.
Identifying the True Cost of Record Retrieval
Some organizations may assume in-house record retrieval is inexpensive enough to keep it in-house. On paper, that conclusion may seem accurate. After all, submitting record requests is typically just one of several responsibilities a team member handles. How costly could a single task be?
However, medical record retrieval comes with many hidden costs. Since retrievals involve several variables and moving parts, the full price of even a single request can fluctuate significantly.
Medical record retrieval carries a number of unseen expenses, including:
- Labor costs – Naturally, retrieval takes time out of a team member’s schedule. The hours spent filling out forms, following up with healthcare providers, and managing relationships can add up, especially if multiple employees are involved. These are hours that could otherwise be spent on higher-value work.
- Administrative costs – Inefficient workflows, manual processes, and reworks all add to the total time required to retrieve records. Attempting to solve these inefficiencies internally can eat up even more time.
- Technology costs – Software and licenses increase the total cost of retrieving records. Each vendor and system has its own subscription fees and maintenance requirements, which can quickly accumulate. Technology is even more costly when several disconnected tools are used together.
- Compliance-related costs – The do-it-yourself approach to record retrieval also puts organizations at risk. Non-compliant storage, incorrect documentation, or the mishandling of Protected Health Information (PHI) can lead to costly reworks or even fines. Under HIPAA, penalties can exceed $2 million.
When you partner with a record retrieval service, these hidden costs are passed on to the third party. However, because the experts have specific expertise, existing relationships, and the latest technology, they can retrieve records more affordably (and more efficiently) than the average organization.
Measuring Time and Productivity Savings
Ultimately, ROI measures the impact that spending has on the bottom line. It can be represented by this simple formula:
ROI = (Net Gains ÷ Total Costs) x 100
To give you an example of what that might look like when hiring a medical record retrieval service, imagine the following scenario.
Let’s say you spend $10,000 annually on retrieval services. But, in doing so, you eliminate manual workloads, recovering $30,000 in employee labor capacity. Additionally, since staff now have more time to focus on revenue-generating work, outsourcing the retrieval nets you an extra $20,000 from clients.
The end-of-year result is a net gain of $40,000. Divide that by the total cost ($10,000), multiply by 100, and you’re left with an ROI of 400%. In other words, for this example, every dollar invested in medical record retrieval services delivers $4 in net return.
Quantifying Financial Benefits
While the figures in the above example are made up, achieving them is possible. Here’s how partnering with a record retrieval service maximizes ROI.
Reduced Staffing Costs
A retrieval partner takes time-consuming tasks away from internal staff.
Even if a single employee earning $50 per hour spends just four hours a week managing retrieval requests, that’s $200 per week dedicated to administrative work. Over the course of a year, that adds up to more than $10,000 worth of employee time that could be redirected to higher-value tasks.
By outsourcing medical record retrieval to a third-party service, law firms and insurance companies can reduce staffing costs. Professional services also ensure accuracy and completeness, which eliminates costly errors and delays.
Lower Overhead
Working with a retrieval service can reduce operating costs across several categories, such as:
- Technology – Switching from scattered systems to a dedicated partner can save you hundreds per month in licensing fees and maintenance.
- Compliance – Having a third party handle compliant communications and file storage on your behalf can further reduce costs and eliminate risk.
- Insurance and HR – If outsourcing record retrieval results in a headcount reduction, organizations may see significant savings on employee benefits and management costs.
Improved Resource Allocation
One of the biggest benefits of outsourcing medical record retrieval for lawyers and insurance professionals is the ability to redistribute internal resources.
By freeing employees from time-consuming retrieval tasks, they can pivot to higher-value, billable work. Any additional revenue generated during those “saved” hours should be included in ROI figures.
The Role of Technology in Driving ROI
Record retrieval services can deliver more ROI thanks in part to cutting-edge technology.q1
Technology supports greater efficiency and visibility by consolidating all retrieval operations into a single system. The best retrieval partners rely on several industry innovations to maximize revenue, including:
- Automation – One of the greatest drivers of ROI in record retrieval operations is the use of AI and automation. Retrieval companies can automate everything from follow-up emails to file organization. By streamlining these once-manual tasks, organizations can save countless hours.
- Tracking tools – Traditionally, much of the time spent on record retrieval is dedicated to chasing down information from healthcare facilities. Tracking tools eliminate the need for this time-intensive task. Rather than reaching out for an update, you can simply check a dashboard that gives you the exact status of your request.
- Reporting capabilities – The value of outsourcing record retrieval doesn’t end when records are delivered. Third parties that upload medical records to a HIPAA-compliant digital library make it easier to search, annotate, and analyze records.
Common Mistakes When Calculating ROI
If you’re new to measuring the ROI of medical record retrieval services, there are several common pitfalls to avoid.
Overlooking Indirect Costs
Identifying the direct costs of record retrieval is simple enough. It’s easy to measure the hours spent and the accompanying salary costs, along with any tech subscription fees.
But when organizations stop their ROI calculations there, they miss the bigger picture. The truth is that medical record retrieval comes with a range of indirect costs. These include:
- The cost of a delayed case resolution or extended claim cycle
- The impact of a negative client experience on future business
- The loss of opportunity when billable hours are displaced by manual tasks
Excluding Non-Financial Benefits
While the economic returns of a more efficient retrieval process are crucial to understand, it’s equally important to calculate the non-financial benefits. Some of the most meaningful benefits extend beyond the numbers alone.
For example, time and effort savings can also lead to quality-of-life enhancements. When attorneys and adjusters can focus on actual cases or claims — instead of routine retrieval requests — they’re more likely to feel engaged and satisfied in their roles.
According to the APA, employees who feel valued at work are more likely to contribute positively to their organization. They’re also more likely to stay with their employer. That’s a form of ROI that a calculator can’t measure.
Neglecting to Create an Evaluation Framework
Many organizations view ROI calculations as a result, when in fact they should be part of a roadmap.
ROI numbers are nothing without a plan to improve them. An evaluation framework allows you to set goals and work toward them.
Ideally, an evaluation framework should cover:
- The metrics used to measure performance
- Your starting point (baseline) and objective (target)
- The key questions your ROI analysis should answer
Even if you don’t create a formal framework, it’s important to understand that ROI measurements are just the beginning.
Building a Strong Business Case for Retrieval Services
From labor and admin costs to technology and compliance, various factors impact the ROI of medical records retrieval services. In the end, if you can save money on retrieval costs while generating more revenue through higher-value tasks, your ROI should increase — and so should your bottom line.
American Retrieval helps organizations reduce the time, cost, and complexity of medical record retrieval. With more than 30 years of industry experience, we deliver efficient and cost-effective record retrieval services. We maintain precise attention to security and compliance, helping reduce the risk of costly penalties that can affect ROI calculations.
Learn how American Retrieval helps organizations maximize value through efficient medical records retrieval services. Book a demo to find out more.
Sources:
The HIPAA Journal. What are the Penalties for HIPAA Violations? https://www.hipaajournal.com/what-are-the-penalties-for-hipaa-violations-7096/
American Psychological Association. Employees really value making a difference at work. Here are 7 tips from psychology to get them there. https://www.apa.org/topics/healthy-workplaces/making-difference-at-work
